question archive Note that an individual consumes more under an "all-you-can-eat" buffet, and when Economist B eats at the buffet, he/she stops when the marginal utility of the last unit of food consumed equals zero
Note that an individual consumes more under an "all-you-can-eat" buffet, and when Economist B eats at the buffet, he/she stops when the marginal utility of the last unit of food consumed equals zero
Subject:EconomicsPrice: Bought3
Note that an individual consumes more under an "all-you-can-eat" buffet,
and when Economist B eats at the buffet, he/she stops when the marginal utility of the last unit of food consumed equals zero.
For Economist A, the individual is paying for each unit of food, so he/she stops eating when the marginal utility of the last dollar spent on food equals the marginal utility received from the last dollar spent on any other good or service.
Now there is a consumer equilibrium theory that is based on Marginal Utility divided by Price. Can you look this up and explain in own words how it works? Then see if you can apply it to the behavior of economist A. Thanks.
